ANNAPOLIS – Gov. Martin O’Malley said Jan. 19 that the state should continue furloughs, lay off several dozen employees, raise college tuition and transfer nearly a billion dollars from sources that include its capital fund in order to close a projected $2 billion budget shortfall.

A spokesperson for the Maryland Insurance Administration told IFAwebnews.com that the agency is not aware of any job eliminations that will impact regulatory work in the state.

O’Malley described his proposed fiscal year 2011 budget, which also includes a variety of other spending cuts, as a continuation of the “fiscal responsibility” he said has defined his administration.

“If you’re not fiscally responsible, everything comes collapsing down like a house of cards,” O’Malley said at a Jan. 19 press conference.

The state government has shrunk under his administration, O’Malley said, with $5.6 billion in total spending reductions over his term and the elimination of 3,500 positions – 202 this year alone “in a state that’s already pretty lean.”

O’Malley proposes slashing $375 million from funding for state agencies and $330 million from assistance to local governments.

This year’s proposed “reorganization/downsizing” of state employees – including the elimination of 44 occupied and 158 vacant positions – would save $25 million, O’Malley said. Furloughs of remaining employees would trim $78 million.

Republican reaction

The effects of the recession cut the state’s projected revenue for the next fiscal year — which begins July 1 – to $12.7 billion in December. The next estimate will come out in March.

Republican leaders railed against the proposed budget, saying it delayed rather than solving problems.

“The governor relies much too heavily on one-time fund transfers,” said House Minority Leader Anthony O’Donnell, R-Calvert. “That $900 million of revenue that we’re trying to replace (with those fund transfers) will re-emerge in the following year. They’re not ongoing structural reductions.”

“We’re supposed to balance our operating budget,” O’Donnell continued. “We’re not supposed to be borrowing money and paying it back over a 15- or 30-year period.”

The proposed budget incorporates $913 million in transfers — largely from the capital budget and a local income tax reserve — into the general fund, which O’Malley said would help the state emerge from the recession. The budget also relies on $389 million in federal Medicaid funding.

If the legislature does not pass its own version of a balanced budget by the end of the session in mid-April, it must extend its session into May.

– Capital News Service